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RESEARCH

Company Update

16 Agustus 2022

Fixed Income Report August 16, 2022

Global Market Update
• The benchmark 10-year UST note yield fell 4 bps to 2.79% on Monday (08/15/22).
• Meanwhile the benchmark 2-year UST note yield fell 6 bps to 3.19% at the same time.
• Yield curve remained inverted and the spread between 2/10-year UST note narrowed to -36 bps.
• Along with the decline in the government bond market, US equity indices also recorded an increase.
• Dow Jones rose 0.45%; S&P 500 was up 0.40% and Nasdaq Composite gained 0.62%.
• Yield of benchmark government bond in other AEs such as UK and Germany also declined.
 
Market Update
• The benchmark 10-year Indo GB yield (FR0091) increased 10 bps to 7.06% on Monday (08/15/22).
• The IDR weakened against USD and was closed at IDR14,742/USD on Monday (vs IDR14,668/USD on Friday).
• However, Indonesia’s 5-year CDS recorded a decline to 97.59 bps on Monday (vs 102.86 bps on Friday).
• Indonesia’s trade balance booked a surplus of USD4.23bn in Jul-22, higher than consensus estimate of USD3.9bn.
• Strong exports were supported by coal price that remains high, yet the declining price of other commodity such as oil & CPO should be anticipated.
• On the other hand, imports rose on the back of strengthening economy as well as improving mobility.
 
Market Projection
• Given the recent development on global and domestic market, we expect the 10 year Indo GB yield to move within a range of 7.00-7.20% for today.
• Attractive Indo GB series to be traded today : FR0063, FR0070, FR0077, FR0037, FR0090, FR0052, FR0085, FR0073, FR0054 and FR0091.
 
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